Co-Applicant

You want to get a loan, but you don’t have the credit or the collateral. So you call up your parents to help you get that car loan or obtain a mortgage. They add their name to the application for credit for that car, or to pay for your starter home.

They are now your co-applicant, and they’re now on the hook for repaying the loan if you can’t meet your obligations. And if you miss your loan, and you end up back in their basement, they will now be doubly disappointed by your life choices and financial decisions.

Typically, it’s better if the co-owners are co-applicants, so married couples buying a car would be a more likely success story. A man and a woman who are co-applicants to buy a boat on their second date because they want to drop everything and, uh...take to the sea? Not so much.